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drusselloctal@gmail.com 2014-11-01 13:14:19 -07:00
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@ -208,7 +208,7 @@ Most transactions include transaction fees, which compensate the bitcoin miners
Transaction fees serve as an incentive to include (mine) a transaction into the next block and also as a disincentive against "spam" transactions or any kind of abuse of the system, by imposing a small cost on every transaction. Transaction fees, are collected by the miner who mines the block that records the transaction on the blockchain.
Transaction fees are calculated based on the size of the transaction in kilobytes, not the value of the transaction in bitcoin. Overall, transaction fees are set based on market forces within the bitcoin network. Miners prioritize transactions based on many different criteria, including fees and may even process transactions for free under certain circumstances. Transaction fees affect the processing priority, meaning that a transaction with sufficient fees is likely to be included in the next-most mined block, whereas a transaction with insufficient or no fees may be delayed, on a best-effort basis and processed after a few blocks or not at all. Transaction fees are not mandatory, and transactions without fees may be processed eventually; however, including transaction fees encourages priority processing.
Transaction fees are calculated based on the size of the transaction in kilobytes, not the value of the transaction in bitcoin. Overall, transaction fees are set based on market forces within the bitcoin network. Miners prioritize transactions based on many different criteria, including fees, and may even process transactions for free under certain circumstances. Transaction fees affect the processing priority, meaning that a transaction with sufficient fees is likely to be included in the next-most mined block, whereas a transaction with insufficient or no fees may be delayed, on a best-effort basis and processed after a few blocks or not at all. Transaction fees are not mandatory, and transactions without fees may be processed eventually; however, including transaction fees encourages priority processing.
Over time, the way transaction fees are calculated and the effect they have on transaction prioritization has been evolving. At first, transaction fees were fixed and constant across the network. Gradually, the fee structure has been relaxed so that it may be influenced by market forces, based on network capacity and transaction volume. The current minimum transaction fee is fixed at 0.0001 bitcoin or a tenth of a milli-bitcoin per kilobyte, recently decreased from one milli-bitcoin. Most transactions are less than one kilobyte; however, those with multiple inputs or outputs can be larger. In future revisions of the bitcoin protocol it is expected that wallet applications will use statistical analysis to calculate the most appropriate fee to attach to a transaction based on the average fees of recent transactions.